German court to rule on MPs' rights on euro bailouts

By Eva Kuehnen

KARLSRUHE, Germany (Reuters) - Germany's Constitutional Court will rule on Tuesday whether a small sub-committee in parliament is representative enough to take decisions over whether the country should grant help to heavily indebted euro zone countries such as Greece in future.

The court in Karlsruhe will rule at about 0800 GMT on a case brought by two opposition MPs who say that giving a nine-person special committee such influence infringes on the rights of German lawmakers.

The panel was set up to take fast and agile decisions on behalf of the powerful Bundestag (lower house) budget committee when it comes to especially urgent or confidential matters.

If the plaintiffs win, the decision-making process in Europe's largest economy could be slowed down as it tries to lead the euro zone out of the debt crisis, since either the 41-member budget committee or a full Bundestag session of up to 620 members would have to be called for decisions on bailouts.

The ruling comes a day after Germany's parliament approved a second, 130-billion-euro bailout package for Greece, of which Germany foots a substantial part, as it does for each bailout under the current European Financial Stability Facility (EFSF).

While there is growing resistance among the German voters to further bailout spending, pressure is also mounting on Berlin from the world's leading economies to drop opposition to increasing the permanent bailout fund - the European Stability Mechanism - in order to free up more international help.

But for more aid, the German government must get approval from the parliament's budget committee after the Constitutional Court, in a landmark ruling in September, gave a bigger say to the German parliament on matters involving the EFSF.

The new sub-committee was suspended by the courts in October after two lawmakers - Social Democrats Swen Schulz and Peter Danckert - lodged a complaint.

They argue that the use of the special committee breaches the constitution as it transfers powers from a full session of the Bundestag on a matter pertaining to the budget.

Pending Tuesday's ruling, any EFSF related legislature has had to go through the plenary of the Bundestag.

Oliver Sauer, a lawyer at the Centre for European Policy (CEP) think-tank, said looking at the previous rulings, the main theme seemed to be about the close feedback between the government and the parliament.

"The smaller the committee, the weaker the feedback," he said. This could be an indication that the court may give less power to the committee, while still keeping it in place to be activated on a case-by-case basis and insist on the feedback of the plenary, Sauer added.

German Finance Minister Wolfgang Schaeuble has urged the court to allow the committee to function, saying the ability of the EFSF to make a decision must not be jeopardised.

(Editing by Roger Atwood)